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In Accounting, An Itemized Statement Of What One Owns, What One Owes, and What One Is Worth Is Called A:
The First Step In Setting Up Records Is To Find Out:
1. What One Owns
2. What One Owes
3. What One Is Worth
Balance Sheet Reports What A Business
Owns-Assets
Owes-Liabilities
Worth-Owner’s Equity
(Name of Business) Navarro’s Car Wash
(Name of Form) Balance Sheet
(Date) June 30, 2007
Navarro’s Car Wash
Balance Sheet
June 30, 2007
Navarro’s Car WashBalance SheetJune 30, 2006
Three Sections of a Balance Sheet
• Assets
• Liabilities
• Owner’s Equity
Assets-(lst Section)
• Things You Own
• Examples:SuppliesCashEquipment
Navarro’s Car WashBalance SheetJune 30, 2006
Assets
Cash On Hand
Equipment
Supplies
Total Assets
Things A Business Owes
-Accounts Payable-Sears, Inc.
-Accounts Payable-IBM Company
Navarro’s Car WashBalance SheetJune 30, 2006
Assets
Cash
Equipment
Supplies
Total Assets
Liabilities
Accounts Pay.-IBM
Accounts Pay./Sears, Inc.
Total Liabilities
What A Business Is Worth
-Jose L. Navarro, Capital
-Jose L. Navarro, Withdrawals
The Worth Of A Business
-Joe Navarro, Capital
-Joe Navarro, Withdrawals
Navarro’s Car WashBalance SheetJune 30, 2006
Assets
Cash
Equipment
Supplies
Total Assets
Liabilities
Dell Computers
Accounts Pay./TG Supplies
Total Liabilities
Owner’s Equity
JL Navarro, Capital
Jon Clark, For Example, Owns The Following:
Cash On Hand $ 5,500
Equipment 25,000
Supplies 2,000
Office Equipment 5,000
Office Supplies 1,000
Total Amount Owned $38,500
Jon Clark Owes The Following:
Owed To TG Supply 1,000
Owed To Max
Furniture 400
Total Amount Owed $ 1,400
The Accounting Equation
Assets = Liabilities + Owner’s Equity$38,500 = $1,400 + $37,100
Jon Clark Owns $38,500
Jon Clark Owes 1,400
Jon Clark Is Worth $37,100
Here Is The Process:
By Subtracting What Jon Clark Owes ($1,400) From What He Owns ($38,500) We Find What He Is Worth.
Summary
Balance Sheet Reports:
• What A Business Owns-Assets• What A Business Owes-Liabilities
• What A Business is Worth-Owner’s Equity
